Top Republican on financial crisis panel slams it for partisanship
The federal commission that investigated the financial crisis descended into partisanship, with its Democratic majority pushing to find "villains and victims" rather than the true causes, the panel's top Republican said Wednesday.
"It was clear from the beginning it was a partisan environment," former Bakersfield Congressman Bill Thomas told the House Financial Services Committee on Wednesday, noting that the commission had six Democrats and four Republicans. "The math is simple."
The Democratic chairman of the Financial Crisis Inquiry Commission, former California Treasurer Phil Angelides, defended the 525-page report released last month. Only Democrats supported the panel's majority findings, which cast blame widely among regulators, corporate executives and consumers for a crisis deemed avoidable.
"The facts have not been challenged," Angelides said. "Everyone can draw their own conclusions."
"But we were looking to you for the conclusions," Rep. Scott Garrett (R-N.J.) said.
Republicans on the committee blasted the panel for not reaching consensus the way that the commission that investigated the September 2001 terrorist attacks did.
"It's sad that important work is hard to take seriously when it was conducted on a partisan basis," said Rep. Jeb Hensarling (R-Texas).
Republicans also criticized Democrats in Congress for passing an overhaul of financial rules last year before the commission even issued its report. Democrats on the committee generally praised the commission's work.
Although Angelides and Thomas had a long history as aggressive partisans, they began their work in mid-2009 saying they wanted to emulate the bipartisanship of the 9/11 commission. That panel, which was split evenly among Republicans and Democrats, produced a widely praised report that became a bestseller for its compelling narrative of the events leading up to the attacks.
Angelides said the financial crisis panel's report was selling well and this weekend would be No. 10 on the New York Times nonfiction bestseller list.
"In 2009, Congress tasked the commission to examine 'the causes of the current financial and economic crisis in the United States' and to probe the collapse of major financial institutions that failed or would have failed if not for exceptional assistance from the government," he said. "We were true to our charge and we fulfilled our mandates."
But it was clear in the commission's final report that bipartisanship had broken down.
Thomas joined two other Republicans in one dissent that said the crisis was an unavoidable result of global economic factors. The fourth Republican, Peter Wallison, wrote his own dissent, blaming government intervention in the housing market.
"I’m disappointed that the commission was unable to put together a unified report," said Rep. Michael Grimm (R-N.Y.). "It seems that some members of this commission were more interested in following an ideological agenda than in assisting Congress."
Thomas said the problems began when the Democratic-controlled Congress created a stacked panel.
"I think we had the money, the time, the staff and the resources necessary for our work to have been a success," he said. "I believe this disappointing result was as much a product of the political motivation in our creation as it was an inability to reach agreement on substantive issues. But when you have the votes, what else really matters?"
Another Republican commissioner, Douglas Holtz-Eakin, said he was disturbed that the process appeared to become partisan toward the end. But he said finding consensus on financial crises is difficult, noting economist are still debating the causes of the Great Depression.
"Particularly given the scope and the timetable the commission was handed, it's in many ways an unsurprising outcome," he said of the three different conclusions.
-- Jim Puzzanghera
Photo: Financial Crisis Inquiry Commission Chairman Phil Angelides and Vice Chairman Bill Thomas. Credit: Bloomberg